Diversity: An Elusive Concept

Many companies have a robust program for recruiting a diverse workforce. Yet the real challenge is not creating diversity but inclusiveness.

by Christian Hasenoehrl

The recent election of Barack Obama has shown that many of the old barriers to different ethnicities occupying top positions are starting to fall. However, while one battle may have been won, the war is far from over. For one, President Obama received the same percentage of the white vote as the last Democrat to run for the office. Straight after the U.S. election, Trevor Phillips, the head of Britain's equality watchdog said that institutional racism would prevent a black prime minister from being elected in the United Kingdom. And in October 2008, the Metropolitan Black Police Association announced a boycott of recruitment drives by the London Metropolitan Police, citing "a hostile atmosphere where racism is allowed to spread."

Many organizations have a robust program for recruiting a diverse array of people, but they aren't able to transform this diversity into organizational excellence. As a result, the real challenge is not diversity; it's inclusiveness. Most diversity programs are in place with a key aim: to protect organizations from the potential legal penalties of noncompliance. This is, at best, a defensive way of managing diversity within an organization.

Inclusiveness programs leap-frog discrimination by making that next step and mental leap -- beyond race, color, or religion -- to talk about talent, strengths, and engagement. This forces organizations to look beyond the strictures of employment and diversity legislation to really focus on an employee's talents and individual contribution to the organization. Barack Obama, after all, campaigned successfully as a Democrat first and foremost in the name of "Change We Can Believe In" -- not as a diversity candidate.

Gallup has interviewed more than 12 million employees and more than 1.3 million managers worldwide since 1996, and what we have found is that great managers -- based on statistical performance and peer review -- innately understand the need to focus on talent. They do not try and grind their people down and mold them into the organizational model. They celebrate differences, look to amplify strengths, and do not believe that their role is to correct the weaknesses of their colleagues.

However, the first step toward creating a more inclusive environment is to measure levels of inclusiveness in the first place. But inclusiveness is an elusive concept, so how do you quantify it? A mid-size healthcare services company asked Gallup to design a survey to measure inclusiveness. Based on thousands of employee interviews, the research identified a list of 10 questions that, when asked of the employees, indicate how inclusive a company is and how effective it is at managing diversity. These questions focus both on perceptions of organizational equality and also on how well employees felt they could use their unique talents.

Interestingly, analysis of the results showed that attitudes about inclusiveness varied across the company and that workgroups with the lowest inclusiveness scores had lower productivity and retention scores than those with higher inclusiveness scores.

There is also a strong linkage between inclusiveness and employee engagement. The results of a nationwide survey of 2,014 working Americans found that 85% of actively inclusive respondents are engaged in their job. More than a decade of Gallup research demonstrates that engagement leads to measurable improvements in business outcomes, including lower turnover, stronger customer loyalty, higher sales, and better profit margins. As an example, engaged employees average 27% less absenteeism than those who are actively disengaged. In a typical 10,000-person company, absenteeism costs the business about 5,000 lost days per year, worth $600,000.

In addition, Gallup research shows that organizations in the top quartile of engagement levels have 12% higher customer advocacy, 18% higher productivity, and 12% higher profitability than bottom-quartile business units. Every other consultancy can probably offer similar evidence -- point being that we know from empirical data that engagement leads to performance. We also know that an employee leaves his or her manager, not the employer.

As a result, the positive business benefits of inclusiveness and its effects on engagement are clear. Companies that rely on defensive antidiscrimination programs to handle differences, or worse, ignore them, will lose opportunities for growth. Diversity should result from organizational design -- not because of a regulatory imperative -- and focus on employees' talents to create a workplace that recognizes and nurtures that talent, whatever color, shape, or form it comes in. After all, America voted for the best policies represented by the most qualified candidate, not for a minority candidate in the name of diversity.

This article is adapted from one originally published in theHRDirector. Reprinted with permission.

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